Illinois, Iowa and other states planned to require a $50 co-payment for unnecessary visits to emergency departments. And California has proposed a $50 co-payment for all visits to emergency departments and a co-payment of $100 for hospital stays that last one day and $200 for longer stays.

Every state plans to implement at least one policy to control Medicaid spending this fiscal year, according to a survey by the Kaiser Family Foundation.

In Wisconsin, the Department of Health Services has proposed dozens of changes in the BadgerCare Plus and Medicaid programs to close a $500 million gap in their budget.

The key budget-writing committee of the Legislature is expected to hold a hearing on many of the proposed changes this week.

The state's Medicaid programs cover health care and long-term care for roughly 1 million people in Wisconsin. And the proposed changes - many that hinge on approval of the federal government - could affect hundreds of thousands of people in Wisconsin.

The shortfall in Wisconsin and other states was expected. State revenue remains below the level in 2007. At the same time, more people are eligible for Medicaid programs because of the rise in unemployment.

Since December 2007, the start of the recent recession, enrollment in BadgerCare Plus and, to a lesser extent, Medicaid, increased by roughly 300,000 people.

The recovery act temporarily gave states additional federal money for Medicaid programs, but those funds ended on July 1.

How to ration care

The challenges facing Wisconsin and other states is a smaller version of the hard choices facing Congress as it tries to reduce the size of the federal budget deficit. And in the background is the prospect of cuts in federal funding for Medicaid.

It also is an example of the broader challenges in slowing the rise in health care spending: Wisconsin and other states essentially are deciding how to ration care.

Most states - 39 in the last fiscal year, 46 this year - have or plan to pay less to hospitals, doctors and other health care providers.

Gov. Jim Doyle's administration relied heavily on that approach when it cut $600 million from the health care programs during the economic downturn.

Gov. Scott Walker's administration has largely avoided that. Instead, the state Department of Health Services has proposed dozens of changes, most of them minor or technical. But two have generated opposition:

Capping enrollment in Family Care and similar programs that provide people who are elderly or disabled with alternatives to nursing homes. As of Oct. 5, 7,011 people were on waiting lists to get into programs, including 476 people who are elderly and 1,510 who are disabled in Milwaukee County.

Shifting more than 215,000 people now covered by BadgerCare Plus into a health plan with fewer benefits, such as coverage only for generic drugs, and charging them higher premiums as well as co-pays.

The broad goal is to provide basic coverage instead of eliminating coverage.

"They are trying to stretch their dollars across the most people," said Thomas DeLeire, director of the La Follette School of Public Affairs at the University of Wisconsin-Madison.

That approach is reasonable, he said, assuming the state has no choice but to find $500 million in cost savings from the health care programs.

Under the proposals, families with incomes between 150% to 200% of the federal poverty level - $27,795 to $37,060 for a family of three - would pay 5% of their income for health coverage.

For a single mother of two with an income of $28,000, the cost would increase from $10 a month to $116. But the increase would be less for families with higher incomes.

"We believe that when compared to what the typical family is paying, this is a fair and reasonable proposal," Dennis Smith, the secretary of the Department of Health Services, said at a public hearing in Milwaukee last month.

Unknown consequences

Smith and others also have noted that more than half of the children living in families with incomes between 100% and 200% of the poverty level - $18,530 to $37,060 for a family of three - are covered by private insurance, based on research done by the University of Wisconsin.

Those families' share of the premium, deductibles and co-payments would easily equal 5% of the family's income under the plans offered by most employers.

That said, most of the children probably live in households with incomes closer to $37,000 than $18,500.

"We agree that you might be able to have a slight increase but to go from $10 a month to $116 a month is devastating for that mother," said Sara Finger, executive director of the Wisconsin Alliance for Women's Health, which is part of the Save BadgerCare Coalition.

The state also would require co-payments of $15.

Research shows the result will be that people will cut back on both needed and unneeded care.

"You want them ideally to cut back on unnecessary care, but they cut back on everything," DeLeire said.

That could be just one of the results.

"We know less than we'd like to know about what the impact of this will be," he said.

Advocates have echoed this.

"There are going to be unintended consequences," said Barbara Beckert, director of the Milwaukee Office of Disability Right Wisconsin.

Beckert and other advocates also have said that they have had little time to analyze the various proposals.

But some brinkmanship also may be coming into play.

Wisconsin will need federal approval to make the proposed changes in the BadgerCare Plus program.

The recovery act and federal health care reform prohibit states from putting new restrictions on Medicaid eligibility or enrollment. But states with budget deficits can drop coverage for adults, though not children, in families with incomes above 133% of the federal poverty level - about $24,644 for a family of three.

The state budget mandates the adults be dropped if the federal government has not approved the proposed changes in BadgerCare Plus by Dec. 31. Yet the budget-writing committee of the Legislature didn't get the proposal from the Walker administration - which it must review - until last week and won't hold hearings until this week.

That will give the federal government little time to consider the changes.